October 15, 2021

Volume XI, Number 288

Advertisement
Advertisement

October 15, 2021

Subscribe to Latest Legal News and Analysis

October 14, 2021

Subscribe to Latest Legal News and Analysis

October 13, 2021

Subscribe to Latest Legal News and Analysis
Advertisement

California Bill Would Authorize Pre-Judgment Wage Liens On Real And Personal Property Of Employers And Third Parties

I often say that to be an employer in California is to be sued.  California is litigious and its labor (and other) laws are maddingly complex.  Last spring, Assembly Member Bonnie Lowenthal submitted a bill, AB 1164, that would add to the woes, not just of employers, but also of any person who has property upon which an employee has “bestowed labor”.  This bill would allow an employee to file a pre-judgment lien for the full amount of any wages, other compensation, and related penalties and damages owed to the employee.

It’s hard to imagine any property owner who at some time doesn’t have third party employees performing work on their property.  For example, a building owner may contract with a third party for window washing service.  If enacted, the bill would allow any employee of the contractor to lien the building owner’s real and personal property.  Of course, a building owner or other business is likely to have scores of contractors performing labor and thus could face a continuing barrage of employee liens.

Homeowners are allowed limited exemptions.  In the case of an employer, the lien would apply to the employer’s principal residence only to the extent that the employee provided labor to the benefit of that household or residence.  In the case of third party owners, the lien does not apply to a claim relating to property bought or services furnished primarily for personal, family, or household purposes, including those benefitting any real property that is the principal residence of the owner.

Importantly, the proposed employee lien would lack many of the limitations and procedural safeguards that apply to mechanics liens.  If enacted, I foresee an ocean of misery for California property owners, including interference with financings and costly litigation to remove liens.  For those inclined to worry about AB 1164 only if it should become law, that doesn’t appear to be unlikely.  It has already passed out of three committees in the Assembly (Judiciary, Labor & Employment, and Appropriations).

© 2010-2021 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume IV, Number 29
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

949-851-5428
Advertisement
Advertisement
Advertisement